Scotland sets higher rate income tax threshold

The Scottish government has elected to freeze the current rates of Scottish income tax.

In 2017/18 the higher rate threshold will increase by inflation to £43,430 rather than to £45,000 as in the rest for the UK.

The rates for 2017/18 will be:

Scottish income tax rates

Bands

Basic - 20%

£11, 500* - £43,430

Higher - 40%

Over £43,430 - £150,000

Additional - 45%

£150,000 and above**

*assuming individuals receive their personal allowance.

** those earning over £100,000 will see their personal allowance reduced by £1 for every £2 over £100,000.

In the foreword of the budget report, cabinet secretary for finance and constitution Derek Mackay, said:

"Our plans for income tax reflect the principles-based approach we have taken in other areas of tax policy, particularly that tax should be proportionate to the ability to pay."

John Cullinane , tax policy director at the Chartered Institute of Taxation, said:

"This won't just be an issue for employers in Scotland, it will also affect any employer outside of Scotland who either has or is looking to hire employees living in Scotland earning at or above the new Scottish higher rate threshold."